Beijing No.1 Intermediate People's Court has released its public verdicts on two cases on unfair competition involving Baidu and Qihoo 360. Soon after that, the court held a press conference to present information of recent cases on unfair competition appearing on the Internet as part of the efforts guiding online market players in their future business practice.

The said two cases both related to two active technology pioneers in China, Baidu and Qihoo 360.

In one case, Baidu sued Qihoo 360 for alleged misconduct of the latter’s anti-virus software which disrupted the normal running of an application program called Hao123 developed by Baidu. The court ruled that the act of Qihoo 360 constituted unfair competition and ordered the company to stop the unlawful act and paid Baidu 500,000 yuan as compensation.

In another case, Qihoo 360 accused Baidu of its wide distribution of a rumor that the accounts and passwords of Qihoo 360’s subscribers were leaked out by Qihoo 360 on purpose. Finally, Baidu was convicted on unfair competition and ordered to post a formal apology to Qihoo 360 on the home page of its website Hao123.com in a bid to eliminate the negative effect thereof. Baidu was also asked to pay Qihoo 360 500,000 yuan as compensation and another 100,000 yuan as the lawsuit fee.

Statistics show that the court dealt with a total of 110 cases on unfair competition from 2010 to 2013, in which 33 were associated with violations on the Internet, accounting for 30% of the total.

Based on the analysis of those cases, the court concluded that online unfair competition primarily took place in the form of defamation and fake promotion, as well as some newly emerging forms such as violations committed through contentious PPC search engine service, vertical search service and the robots exclusion protocol, and violent disturbance among similar products belonging to different competitors.

"Currently, there are four prominent problems occurring in online disputes," said Cui Xuefeng, head of the No.1 IPR Tribunal of the court. According to him, repeated infringement activities were prevalent; many victims finally turned into desperate offenders; retaliatory acts increased; new ways of illegitimate commercial behaviors assisted by advanced technologies constantly showed up.

At the press conference, Jiang Ying, head of No.2 IPR tribunal of the court presented top ten typical cases handled by the court in recent years in this regard. Jiang said that the court was very serious about those cases and stopped a bundle of illegal activities by releasing judicial sentences.

In determining the amount of compensation, the court adopted the upper limit of the statutory compensation in some specific cases in order to impose more severe punishment for unfair competition on bad faith. For instance, in the lawsuit of Dianping.com VS Aibang.com, the court awarded the winner as high as 500,000 yuan compensation.

Based on the amended Civil Procedure Law of China, the court issued injunctions in two cases related to the Internet for the first time, banning infringers from violating others’ rights in time, a move which helped innocent parties avoid losing their market despite a successful lawsuit.